Grant Herbert found guilty over failed insurance group
Grant Herbert found guilty on 24 charges over failed insurance group
By Jonathan Underhill
Sept. 11 (BusinessDesk) - Grant Herbert, the former owner and director of failed insurance broking firm Herbert Insurance Group, has been found guilty on 24 of 26 charges he was facing under the Crimes Act and Secret Commissions Act.
The Auckland District Court heard that between 2005 and March 2011, Herbert failed to forward about $2.5 million of client premiums to insurers, diverting the money to meet his company's operating expenses. Some clients were left uninsured as a result.
Herbert was remanded on bail and will be sentenced on Oct. 16 after being found guilty of 17 Crimes Act charges and seven Secret Commissions Act charges. The court found him not guilty of one Crimes Act charge and one Secret Commissions Act charge.
The charges followed a Serious Fraud Office investigation. Herbert originally appeared before the court in May 2012. He was found guilty of corruption offences relating to giving secret commissions to the employee of a customer in return for referring insurance business to his company.
That employee was Christopher Green, a commercial property manager who already pleaded guilty to receiving secret commissions and was sentenced to five months’ home detention in June last year. The home supply company was overcharged approximately $220,000 for its insurance, which was split between Herbert and Green, the SFO said in a statement.
Prior to the trial Herbert pleaded guilty to using a forged document in relation to obtaining a credit facility in the sum of $250,000.
“Mr Herbert breached the confidence and trust of both the insurers he worked with and his clients, many of whom were exposed to potentially significant losses when they were misled by Mr Herbert into believing they were insured," said SFO director Julie Read. "The offending Mr Herbert engaged in undermines the insurance broking industry and the insurance industry itself, which is largely based on trust."
Herbert Insurance was put into liquidation and receivership in March 2011 with a shortfall of about $3.1 million owed to insurers. Acting on complaints about the shortfall, the SFO began an investigation that same month on the basis that serious or complex fraud had been committed.